Carrier Global Q1 Results Surpass Street Expectation, Reaffirms FY22 Guidance

Carrier Global Corp CARR reported a first-quarter FY22 net sales decline of 1% year-over-year to $4.65 billion, driven by the Chubb divestiture, +10% on an organic basis, beating the consensus of $4.52 billion.
Sales by segments: HVAC $2.97 billion (+19.5% Y/Y), Refrigeration $976 million (-2.9% Y/Y), and Fire & Security $818 million (-37.3% Y/Y).
The operating margin for the quarter was 37.3%, compared to 12.2% a year ago. Operating margin was up over 2,500 bps due to the gain on the sale of Chubb. Adjusted operating margin expanded by 110 bps to 14%.
Adjusted EPS was $0.54, above the consensus of $0.47.
CARR reported net cash outflows from operating activities of $202 million for Q1 versus cash generated of $184 million in 1Q21. Free cash flow usage was $258 million.
During the quarter, Carrier repurchased $741 million of its common stock, repurchased $1.15 billion of its long-term notes, and received $2.9 billion in cash proceeds from the divestiture of Chubb.
FY22 Outlook reaffirmed: Carrier Global expects Sales of about $20 billion versus the consensus of $19.94 billion, with high single-digit organic sales growth; Adjusted operating margin up ~75 bps.
It expects an Adjusted EPS of $2.20 - $2.30, versus the consensus of $2.27.
Price Action: CARR shares are trading lower by 4.77% at $38.33 on the last check Thursday.

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